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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): August 29, 2001
K2 DIGITAL, INC.
(Exact Name of Registrant as Specified in Charter)
Delaware 1-11873 13-3886065
(State or Other (Commission File Number) (I.R.S. Employer
Jurisdiction of Identification Number)
Incorporation)
30 Broad Street
New York, New York 10004
(Address of Principal Executive Offices) (Zip Code)
(212) 301-8800
(Registrant's telephone number, including area code)
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ITEM 2. Acquisition or Disposition of Assets.
On August 29, 2001, K2 Digital, Inc. (the "Company") completed the closing under
an agreement (the "Purchase Agreement") with Integrated Information Systems,
Inc., a Delaware corporation ("IIS") pursuant to which, among other things, IIS
purchased certain fixed and intangible assets of the Company, including certain
of the Company's customer contracts, furniture, fixtures, equipment and
intellectual property, for an aggregate purchase price of $444,000, of which
$419,000 was paid in cash and $25,000 of capital lease obligations were assumed
by IIS.
Under the terms of the Purchase Agreement, IIS occupies certain premises of the
Company in exchange for assuming the Company's office lease obligations and IIS
has made offers of employment to substantially all of the remaining employees of
the Company, which offers have been accepted.
In addition to the purchase price and as consideration of the Company's release
of certain employees from the non-competition restrictions contained in their
agreements with the Company, the Company received from IIS at closing a
recruitment and placement fee of $75,000. In addition, the Company will receive
from IIS an additional placement fee of $7,500 per key employee and $2,500 per
other employee that remains employed by IIS through December 31, 2001. This
additional contingent placement fee will be paid by IIS in cash in five monthly
installments beginning August 31, 2001, pro rated monthly for the number of
employees retained.
Under the Purchase Agreement, the Company also received from IIS a cash fee of
$50,000 in return for entering into certain noncompetition provisions contained
in the Purchase Agreement, which provide that the Company will not, for a period
of five years, (i) engage in any business of substantially the same character as
the business engaged in by the Company prior to the transaction, (ii) solicit
for employment any employee of IIS (including former employees of the Company),
or (iii) solicit any client or customer of IIS (including any customer
transferred to IIS under the Purchase and Sale Agreement) to do business with
the Company.
Accordingly, the aggregate consideration to be delivered to the Company at
closing was $544,000, of which approximately $258,000 was paid directly to K2
Holding LLC, an affiliate of SGI Graphics, LLC (collectively, "SGI"), the
Company's principal secured creditor, in order to release SGI's security
interest in the assets of the Company.
ITEM 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Financial Statements of Business Acquired.
Not applicable.
(b) Pro Forma Financial Information.
The pro forma financial information required to be filed pursuant to Item
7(b) of Form 8-K was not available at the time of filing this Current Report on
Form 8-K and will be filed by
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amendment on a Form 8-K/A as soon as practicable, but in no event later than 60
days after August 29, 2001.
Exhibits.
10.1 Master Transaction Agreement, dated as of August 20, 2001, between the
Company and Integrated Information Systems, Inc.
99.1 Press Release dated August 30, 2001 of the Registrant.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
K2 DIGITAL, INC.
Date: August 30, 2001 By: /s/ GRAY W. BROWN
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Gray W. Brown
Chief Operating Officer